Improved/Single Payer MEDICARE FOR ALLMEDICARE · PDF fileImproved/Single Payer MEDICARE FOR ALLMEDICARE FOR ALL and HEALTH CARE REFORM ... Kaiser/HRET Survey of Employer ... Elimination

Improved/Single Payer MEDICARE FOR ALLMEDICARE FOR ALL

and HEALTH CARE REFORM

Oliver Fein, M.D.Professor of Clinical Medicine and Public Health

Associate DeanOffice of Affiliations

Office of Global Health EducationWeill Cornell Medical College

New Directions in American Health CareHofstra UniversityHofstra University

March 11, 2010

DISCLOSURES

Dr Oliver Fein has no relevant financialDr. Oliver Fein has no relevant financial relationships with commercial interests

Dr. Oliver Fein is President of Physicians for a National Health Program

PRESENTATION OUTLINE

1. Recent history of U.S. health care reform

2. Challenges facing U.S. Health Care g gSystem

3. Comparison of Congressional Health Care Reform and single payer improved g p y pMedicare for All

4. What’s Next?

HEALTH CARE REFORMHEALTH CARE REFORMOBAMA’S FATEFUL CHOICE

• He did not want to “start from scratch”

H h d t f d t l h i• He had two fundamental choices:

1) to build on the public sector (Medicare) ) p ( )or2) to build on the private sector

• He chose to try to reach universal coverage byexpanding private insuranceexpanding private insurance

Progress(?) of US Health Reform

Employer mandate

Individual mandate*Medicare

??Public option*** “each eligible individual must

enroll in an applicable health plan for the individual and must pay any ** “ h t llp y ypremium required with respect to such enrollment.” (S.1775)

** “you can choose to enroll in the new public plan”

WHAT HAPPENED TO THEWHAT HAPPENED TO THEPUBLIC OPTION?

The original “robust” Plan• Open enrollment: “Medicare for everyone who wants it”• Medicare rates, backed by the governmentMedicare rates, backed by the government• 119 million members (Lewin)

Th H PlThe House Plan• Restricted enrollment (only the uninsured)• 6 million members (<2% of the population)• Negotiated rates, self sustaining

The Senate PlanThe Senate Plan• No public option

CHALLENGES FACINGCHALLENGES FACING HEALTH REFORM

1. Declining access2 Escalating costs2. Escalating costs3. Defining of benefits4 R i d h i4. Restricted choice5. Uneven Quality 6. Lack of primary care 7. How to pay for reform7. How to pay for reform

CHALLENGE #1

DECLINING ACCESSDECLINING ACCESS

The Epidemic of UnderinsuranceNumber of people spending more than 10% of income on health care (Millions)

60

70Number of people spending more than 10% of income on health care (Millions)

50

60

30

40

20

30

10 Insured Uninsured

02000 2007

Source: Too Great a Burden, Families USA, December 2007

ImprovedImprovedMEDICARE FOR ALL

• Automatic enrollment

• Federal guarantee

• All residents of the United States

• “Everybody in, nobody out”Everybody in, nobody out

CongressionalHEALTH CARE REFORM

• Mandates purchase of private HI• Mandates purchase of private HI

• Expands Medicaid eligibility

• Subsidizes premiums up to < 400% FPL

• Insurance market reforms: Guaranteedissue; no rescissions; no annual/life limits

Trend in the Number of Uninsured Nonelderly, 2012–2019Under Current Law and House and Senate Bills

13

Millions

80

51 51 51 52 53 53 545160

80 Current lawHouseSenate

51 51 51 52 53 53 551

5135

50 5040

17 1818181826 23

2323232328

20

17 18

02012 2013 2014 2015 2016 2017 2018 2019

Note: The uninsured includes unauthorized immigrants. With unauthorized immigrants excluded from the calculation, nearly 94% and 96% of legal nonelderly residents are projected to have insurance under the Senate and House proposals, respectively.Data: Estimates by The Congressional Budget Office.

CHALLENGE #2

ESCALATING COSTSESCALATING COSTS

Insurance Premiums • Workers’ Earnings • Inflation 1999-2008

119%120%

140%

Health Insurance Premiums

Workers' Earnings

80%

100%Overall Inflation

60%

80%

34%

29%20%

40%

0%1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Kaiser/HRET Survey of Employer‐Sponsored Health Benefits, 2000‐2008. Bureau of Labor Statistics, Consumer Price Index

High Cost of Health Insurance P i It’ E T E iPremiums: It’s Even Too Expensive

for the Middle Class TodayyNational Average for Employer-provided Insurance

Single Coverage $5,791 per yearFamily Coverage $13,375 per yearFamily Coverage $13,375 per year

Note: Annual income at minimum wage = $13,624 g ,Annual income of average Wal-Mart worker = $17,114

Source: Kaiser Family Foundation/HRET Survey of Employee Benefits, 2009

RISE IN PERSONALRISE IN PERSONAL BANKRUPTCIES

62% of personal bankrupcties are due to medical expenses and over 75% had phealth insurance at the outset of theirbankrupting illness *bankrupting illness.

* Himmelstein, et.al. Am J Med, August, 2009

ImprovedMEDICARE FOR ALL

Low Administrative Costs = Single Payer

• Administrative cost and profit

M di 2 3 %- Medicare: 2-3 %- Private insurance: 16-30%

• $400 billion* redirected to cover the uninsuredand to expand coverage for the underinsured

* NEJM 2003:349;768-775

Covering Everyone and Saving Money through Medicare for AllMoney through Medicare for All

Additional costsCovering the uninsured and poorly-insured +6 4% 134

$ BCovering the uninsured and poorly-insured +6.4%Elimination of cost-sharing and co-pays +5.1%Savings

134107241Total Costs +11 5%Savings

Reduced insurance administrative costs -5.3%R d d h it l d i i t ti t 1 9%

241-111

21

Total Costs +11.5%

Reduced hospital administrative costs -1.9%Reduced physician office costs -3.6%B lk h i f d & i 2 8%

-21 -7659Bulk purchasing of drugs & equipment -2.8%

Primary care emphasis & reduce fraud -2.2%-59-46313Total Savings 15 8%

Source: Health Care for All Californians Plan, Lewin Group, January 2005

-313Total Savings -15.8%Net Savings - 4.3% - 73

Private insurers’ High Overhead

SINGLE PAYER OFFERS REALSINGLE PAYER OFFERS REALTOOLS TO CONTAIN COSTS

• Global budgeting of hospitals

• Capital investment planning

• Emphasis on primary care; coordination of care; alternative ways of paying for care

• Bulk purchasing of pharmaceuticals

CongressionalHEALTH CARE REFORMHEALTH CARE REFORM

Enlarges the risk pool by mandating Penalties Enlarges the risk pool by mandating Penalties for Un-insurance

1. Individual mandateHouse: penalty=2.5% adjusted gross incomeSenate: penalty=$1500/family

2. Employer mandate (if payroll > $750,000)House: penalty=8% of payrollSenate: penalty=$750/employee

3. Employment-based insurance unchangedEmployers can change plans and coverageInsurers can change provider networksInsurers can change provider networksEmployees must accept employer plan

CongressionalgHEALTH CARE REFORM

Offers pseudo-tools to contain costs

• Health Information Technology (HIT)

• Chronic Disease Management

• Payment reforms (e g medical homes)Payment reforms (e.g., medical homes)

Total National Health Expenditures (NHE), 2009–2019Current Projection and Alternative Scenarios

NHE in trillions

$5

$5Modified current projection*Current projection

NHE in trillions

$4.7$4.5

6.6% annual growth

$4.8

$3

$4

$4p j

Senate 6.4% annual growth

6.0% annual growth

$2

$3

$3

$2.5

growth

$1

$2

$

$0

$1

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Notes: * Modified current projection estimates national health spending when corrected to reflect underutilization of services by previously uninsured. Source: D. M. Cutler, K. Davis, and K. Stremikis, Why Health Reform Will Bend the Cost Curve, Center for American Progress and The Commonwealth Fund, December 2009.

CHALLENGE #3CHALLENGE #3DEFINING BENEFITS

• Basic/Preventive vs ComprehensiveBasic/Preventive vs. Comprehensive benefits

• Primary care vs. specialty care

• Alternative and Experimental therapiesAlternative and Experimental therapies

ImprovedImprovedMEDICARE FOR ALLComprehensive coverage- Preventive services

H it l- Hospital care- Physician services- Dental services- Dental services- Mental health services- Medication expensesp- Reproductive health services-Home nursing home care“All medically necessary services”Any exclusions? How decided?


No Co Pays or DeductiblesNo Co-Pays or Deductibles

• Reduce use of needed and unneededservices equally

U d f i i• Under use of primary care services

• Not effective in reducing over use of technology g gyintensive services

Eliminate self referral to MD owned- Eliminate self-referral to MD owned - Reduce defensive medicine

CongressionalCongressionalHEALTH CARE REFORM

• No Standard Benefit Package mandatedNo Standard Benefit Package mandated

R d li i d• Reduces or eliminates co-pays and deductibles on preventive services only

CHALLENGE #4CHALLENGE #4RESTRICTED CHOICE

• 42% of employees have no choicep y

• Private health insurance limits choice to the network of doctors and hospitals with whom they have negotiated contractswhom they have negotiated contracts

• You pay more to go out of network• You pay more to go out of network


Expands Choice

• No limit to a network of providers

• Free choice of doctor and hospital

• Delinks health insurance from employmentp y


Creation of HI Exchanges Expands ChoiceCreation of HI Exchanges Expands Choice

• House: National Exchange with State option- Combines individual and small group markets

into one insurance pool and one Exchange- National public option- National public option

• Senate: State exchanges with federal back-up- Separate pools for individual and small groups- No public option

• You remain limited to the insurer’s network


Restricts Choice when it comes to abortion

• House: Stupak Amendment

- Codifies Hyde AmendmentBans abortion coverage in “public option”- Bans abortion coverage in public option

- Bans abortion coverage in sany private planthat accepts public subside funds

- Allows separate abortion “riders”

• Senate: Nelson Amendment

- Allows states to prohibit abortion coverage- Allows states to prohibit abortion coveragein state-run exchanges

- If states allow abortion coverage, requires enrollees or employers to send two checks

- Insurers must keep abortion coverage moneyseparate from federal subsidies

CHALLENGE #5:CHALLENGE #5:UNEVEN QUALITY

• In 2008 U S was last among 19In 2008, U.S. was last among 19 industrialized nations in mortality amenable to health careamenable to health care.

I 2006 15 h• In 2006, we were 15th.


• National data on health care quality vs. proprietary data held by private HIproprietary data held by private HI

N i l d d d bli i• National standards and public reporting

• HIT for the nation with patient protectionsp

CongressionalgHEALTH CARE REFORM

• Comparative Effectiveness Research

• Center for Quality Improvement (House)

• Patient-Centered Outcomes Research (Senate)

• National quality strategy with public reporting

CHALLENGE #6:CHALLENGE #6:LACK OF PRIMARY CARE

• Average medical school debt = $160,000

• Primary care is under-reimbursedPrimary care is under reimbursed

M di l h l d t i• Medical school graduates going into specialties


• Debt forgiveness for primary care

• Malpractice payment for primary careproviders (MDs NPs and PAs)providers (MDs, NPs and PAs)

• Patient Centered Medical Homes (team• Patient-Centered Medical Homes (teambased care, open access, coordination of

h /i di i )care; phone/internet medicine)


• HousePilot medical homes and ACO programs- Pilot medical homes and ACO programs

- Center for Payment Innovation- Increase Medicare payments for PCPs by 5%- Brings Medicaid PCPs up to Medicare levelBrings Medicaid PCPs up to Medicare level - National prevention and wellness strategy- Prevention and Wellness Trust Fund - Reduced cost sharing for prevention g p

• Senate- Medicaid enrollees may designate medical home- ACOs may share savings with Medicare - Creates a CMS Innovations Center - Free annual wellness visit for Medicare

E t t d l ll- Encourage state and employer wellness programs- Reduced cost sharing for prevention

CHALLENGE #7CHALLENGE #7

HOW TO PAY FOR REFORM


• Public fundingPublic funding

- Payroll tax- Corporate taxes- Incomes taxes

• No premiums: regressive

• No increase in overall healthcare spending, because of p g,administrative savings


N fi / i d li dNon-profit/private delivery system under local control

- Doctors not salaried by government - Hospitals not owned by government- This is not “socialized medicine”

A publicly funded-privately deliveredA publicly funded privately delivered partnership


1. Increased taxes- House: Surtax on wealthy ($461 mill)

S t E i t “C dill ” h lth i l- Senate: Excise tax on “Cadillac” health insurance plans

2. Savings from Medicareg- Advantage: ($136 – 170 mill)- Provider payment: ($151 – 177 mill)

3. Revenue from reduced fraud and abuse

OBAMA PLAN1. Expanded coverage, but not universal

2 Cost control by market means2. Cost control by market means

3. No definition of coverage

4. Choice thru State-based exchanges,but no public option

5. Limits on abortion

6. Primary care/quality pilots

7 F di E i t “C dill ”7. Funding: Excise tax on “Cadillac” plans and Medicare cutbacks

Single Payer MEDICARE FOR ALLMEDICARE FOR ALL

THE PHYSICIANS’ PROPOSAL(JAMA A t 13 2003 P 798 805)(JAMA, August 13, 2003 P. 798-805)

1 Universal coverage/automatic enrollment1. Universal coverage/automatic enrollment2. Low administrative costs=single payer3. Comprehensive coverage without co-pays

d d d tibland deductibles 4. Maximum choice of Doctor, NP, Hospital5. Improved quality6. Expanded primary care 7. Publicly-funded/privately delivered

MEDICARE 2.0

Conyers HR 676 Expanded and improvedMEDICARE-FOR-ALLMEDICARE-FOR-ALL“Single Payer NH Care”

(86 C i f )(86 Co-sponsors in House of Rep) • Automatic enrollment• Comprehensive benefits• Free choice of doctor and hospital• Doctors and hospitals remain independent• Financed through progressive taxes • Costs contained through capital planning, budgeting, quality

reviews, primary care emphasis

Sanders (& McDermott): American Health Security Act

S 703 (HR 1200)( )

1.Automatic enrollment2.Comprehensive benefits3.Operated by States using Federal standards4.Free choice of doctor and hospital5 Doctors and hospitals remain independent5.Doctors and hospitals remain independent6.Public agency processes and pays bills7.Financed through payroll taxes

IN CONCLUSION

• A system based on private insurance plans- will not lead to universal coverage- will not create affordable insurance

• A Medicare for All System- can provide comprehensive serviceswhile costing no more than present

- can provide tools to control costs i th f tin the future

We Can’t Wait Another 16 Years! We Need Real Health Care Reform BeforeNeed Real Health Care Reform Before

the Premium Takes All our Income!

Today

Source: American Family Physician, November 14, 2005

WHY WE CONTINUETO ADVOCATE

MEDICARE FOR ALL• Present reform proposals won’t solve the problem• The economic crisis calls for government

stimulus of the economy• Everyone benefits: the uninsured, the underinsured,

and everyone else who is insecurely insuredand everyone else who is insecurely insured• Employers will be relieved of the burden of

rising health care costs/retiree benefits and unfair gcompetition from employers who don’t offer HI

• Every other industrialized country has done itI i ll th i ht thi d !• It is morally the right thing to do!

CONTACTS AND REFERENCES• PNHP-NY Metro: www.pnhpnymetro.org

• PNHP National: www.pnhp.org

• Bodenheimer TS, Grumbach K, Understanding Health Policy: A Clinical Approach. McGraw-Hill, 2005

i O i A ( di ) C l h S A• Fein O, Birn AE. (editors), Comparative Health Systems. Am Jour Public Health 2003; 93: 1-176

• O’Brien ME Livingston M (editors) 10 Excellent Reasons for• O Brien ME, Livingston M (editors), 10 Excellent Reasons for National Health Care. New Press, 2008

• Geyman J, Do Not Resuscitate: Why the Health InsuranceGeyman J, Do Not Resuscitate: Why the Health Insurance Industry is Dying and How We Must Replace It. Common Courage Press, 2008

CFO Magazine PollFebruary 16, 2006

Survey of 249 Senior Financial Executives

“Do you think that Congress should consider a NationalHealth Program (i.e., single payer health insurance ?)”g ( , g p y )

• 32% Yes• 32% Yes

• 45% No

• 23% Not sure

LABOR SUPPORT FOR HR676

• 560 Union organizations in 49 states

130 C t l L b C il• 130 Central Labor Councils

• 39 State AFL-CIOs (AL AR AZ CA CO CT• 39 State AFL-CIOs (AL, AR, AZ, CA, CO, CT, DE, FL, GA, KS, KY, IA, IN, MD-DC, ME, MN, MO, NC, ND, OH, OK, OR, PA, SC, SD, TN, TX VT WA WI WV WY)TX, VT, WA, WI, WV, WY)

• 20 International UnionsU

FAITH-BASED SUPPORT FORFAITH BASED SUPPORT FOR SINGLE-PAYER

• General Assembly of the Presbyterian Church USA proclaimed single payer, universal national health insurance, “the program that best responds to the moral i ti f th l ”imperative of the gospel.”

• General Assembly of the Unitarian Universalists endorsed HR 676.

LOCAL GOVERNMENTLOCAL GOVERNMENT SUPPORT FOR SINGLE-PAYER• State House Reps: Kentucky and New Hampshire,

NY State Assembly passed resolutions supporting HR 676HR 676

• Cities: Baltimore to San Francisco• Cities: Baltimore to San Francisco

• U S Conference of Mayors (representing over• U.S. Conference of Mayors (representing over 1,000 Cities with pop >30,000) adopted a resolution in support of HR 676 in June 2008

NURSE SUPPORT FOR HR 676NURSE SUPPORT FOR HR 676 and SINGLE PAYER

• California Nurses AssociationCalifornia Nurses Association

N i l N O i i C i• National Nurses Organizing Committee

• NYS Nurses Association

PHYSICIAN SUPPORT FORPHYSICIAN SUPPORT FOR SINGLE PAYER

x% of physicians “support government legislation to establish national health insurance”*

59% f ll h i i• 59% of all physicians• 83% of psychiatrists• 71% of pediatric sub-specialists• 69% emergency medicine physicians• 69% emergency medicine physicians• 65% general pediatricians• 64% general internists• 60% family physicians60% a y p ys c a s• 55% general surgeons

*Carroll AE, Ackermann RT, Annals of Internal Medicine, April 2008

Improved/Single Payer MEDICARE FOR ALLMEDICARE · PDF fileImproved/Single Payer MEDICARE FOR ALLMEDICARE FOR ALL and HEALTH CARE REFORM ... Kaiser/HRET Survey of Employer ... Elimination

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